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Currency Plunge Is Giving Japan Another Shot at Reflation

  • Prices inflated by yen seen helping generate steady inflation
  • Government warnings on yen stay below April’s intensity levels
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Japan Retailers Jolted by Weak Yen
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More often than not, a crumbling currency is a sign of deep economic malaise -- like the euro’s swoon in 2014 or the pound’s post-Brexit-vote meltdown in 2016. For Japan in 2022, some see it as the best shot at recovery.

The yen has tumbled to a two-decade low against the dollar, caught in the crossfire between the two wildly different monetary policy regimes in Japan and the US. The Bank of Japan is pinning interest rates to zero in a bid to boost a sputtering economy and spur price growth, while the Federal Reserve is hiking furiously to beat back raging inflation.